Last Updated on July 27, 2022 by Luke Feldbrugge
The landscape of possibilities for EMS home loans is all over the map. Some mortgage programs are specifically for EMS workers and first responders while others, though helpful, are more generic loan assistance initiatives that you might qualify for. It’s helpful, whether you are going for your first home or buying a home later in your career, to know what’s out there for EMT home loans and paramedic home loans.
If regular loans are complicated, then mortgages are like high maintenance loans. You probably know what they are and maybe some of the elements of mortgages, but it’s good to know the ins and outs of EMS home loans for EMTs and paramedics.
EMS Home Loans: How They Work
If you know something about mortgages, then you know the money lending industry has its own unique language. Some of the curveballs you might see during your loan application include:
- Closing Costs
- PITI (Principle, Interest, Taxes and Interest)
- ARMs versus fixed-rate loans
Once you start the application process, mortgage loan companies will be asking for a lot of information. One of our blogs explains the application process clearly, both the ins and the outs. The section on pre-approval discusses how it can be instrumental to your home search, especially in today’s competitive real estate market.
Homes for Heroes
We at Homes for Heroes provide mortgage help, and help throughout the buying process, that is specific to EMS heroes such as yourself. We’ve been at it for 20 years, serving community heroes and rewarding them by saving them money when they purchase a house. We have developed a 3-step process that is designed to help you navigate the world of EMS home loans. We will:
- Pair you with one of our real estate agents and mortgage specialists
- Simplify and guide you through the home buying process
- Give you a Hero Rewards® check after you close
The average check we issue as Hero Rewards savings is $3,000 when you close on a home with our specialists. Our heroes typically use the money for appliances, repairs, renovations, and other projects that emerge after they buy a home.
“The entire selling and buying process went wonderful with the Homes for Heroes program. We work in the medical field and it feels great to be appreciated. This extra help has been amazing, especially with all the moving expenses. Thank you so much for helping our family.” – Sandra and Justin – EMS – WA
Your job can be incredibly complicated, so we have eliminated as many obstacles as possible. It’s easy – there are no fees and our specialists want to specifically assist heroes like you with their home buying and save you some money in the process. That’s why they joined Homes for Heroes.
When it comes to EMS home loans, we provide you with experts on the real estate side as well as the lending side. That way we have all the bases covered, both when you are out house hunting and when you are signing the documents for the EMS home loan mortgage on your new home.
If you are looking at EMS home loans, you should investigate FHA loans. This is a mortgage insurance program from the Federal Housing Administration. If down payments have you discouraged, an FHA loan can lower yours to 3.5% if you qualify. In contrast, for a conventional loan, the down payment can be as much as 20%. They are called FHA loans but the agency doesn’t actually issue the loan. It grants loan insurance meaning they are confident the borrower can handle the mortgage. The loan itself comes from a traditional mortgage lender.
To qualify, the FHA will want to know things like:
- Is your credit score above 580? That’s not an absolute requirement because you can get one if your credit score is as low as 500. In that case, however, your down payment rate would likely be closer to 10%, not 3.5%.
- Can you prove you have steady employment?
- Do you have a history of honoring debts?
- Can you prove you have sufficient income?
In addition to these requirements, eligible mortgage recipients need to pay for private mortgage insurance for their loan.
Many EMS professionals have been in the military, and if you are one of them, you will do yourself a favor if you check out VA loans. These loans are reserved for active service members, military veterans or eligible surviving spouses. The Department of Veterans Affairs backs the loan, which reduces the risk for private mortgage lenders to issue this type of mortgage. The benefits of the VA loan are considerable:
- No down payment
- Low rates in terms of interest
- Limited closing costs
- Zero private mortgage insurance
- This is a lifetime benefit that you can use multiple times.
If you qualify, VA loans can make a real difference in the mortgage you can afford (and the house you could possibly purchase).
A lot of EMS professionals live, and work in, rural counties. If that’s you, you should also look into a USDA loan, sponsored by the U. S. Department of Agriculture. These loans are designed to stimulate housing growth in rural areas.
Benefits of USDA loans include:
- No down payment
- Reduced mortgage insurance
- Below-market mortgage rates
If you are looking at a particular house, it’s worth it to plug the address into the USDA search map to see if it is in an eligible area for these loans. There are also household income limits for eligible borrowers.
Good Neighbor Next Door: EMS Housing Program
One key factor to being eligible for a mortgage is the affordability of the property you want to purchase. If you can find a home that is significantly discounted, you are much more likely to be eligible for a mortgage–even if you are a first time home buyer. Enter the Good Neighbor Next Door program. While it is not technically a mortgage program, the GNND is a discounted housing program for emergency medical services technicians and other paramedics. It comes from the U.S. Department of Housing and Urban Development (HUD), and one of its goals is to a more affordable home option for:
- EMS, emergency medical technicians and paramedics
- Fire fighters
- Law Enforcement Officers
The houses available to eligible Good Neighbor program participants are half off–50% off the list price of the home.
These homes are located in revitalization areas as identified by HUD. Revitalization regions include:
- Neighborhoods where household income is lower than average
- Communities where homeownership rate is low
- Areas where there are a lot of foreclosures
These HUD revitalization areas need economic and community development, and one way to do that is to make deeply discounted, foreclosed properties available to local community heroes. As an EMS worker, if you get one of these homes, you will need to agree to live there as your primary residence for at least three years.
Because the Good Neighbor homes are typically foreclosures, many of them will need some renovations and fixes before you can move in. HUD anticipated that and provides financing to make foreclosed eligible single family homes move-in ready. In addition to EMS Home Loans, there’s help in the form of 203(k) Rehab Mortgage Insurance. That program helps you to finance the purchase of a home, plus any rehab costs, and then folds them together into one mortgage. There are two options:
- Limited 203(k) for homes that require less renovation (up to $35,000)
- Full 203(k) for more substantial fixer uppers (up to 110% of the property’s value)
This program protects both borrowers and lenders by insuring a single, long-term, fixed or adjustable rate loan that covers both the purchase and rehab of the property.
HELPER Act: A Future for EMS Home Loans
There is a bill before Congress right now called the HELPER Act, and it is a new special program for community heroes such as EMS workers, police officers, firefighters, and educators. It is currently being debated by the House of Representatives, but it has bi-partisan support and the support of the President. That’s good news.
Some people have called it the VA-loan equivalent for EMS because it provides zero-down-payment home loans for paramedics, EMTs and other first responders. It also waives private mortgage insurance for the borrower, which adds to your savings by avoiding that monthly payment (though there would be one up front 3.6% mortgage insurance premium).
Large down payment requirements can really put a damper on your house hunting, so down payment assistance is a huge step forward for EMS mortgage programs.
If you are an EMS professional in the housing market, keep your eye on this bill.
Being able to provide savings and real estate advice to EMS professionals is a great honor for Homes For Heroes and our local real estate and mortgage specialists. In our efforts, we hope to reward EMS workers of all stripes: emergency medical responders, emergency medical technicians, advanced emergency medical technicians and paramedics. Your hard work inspires us, so sign up today and let us show you how we can help you.